Adani Wilmar has big plans for Mantralayam unit

Ahmedabad-based Adani Wilmar Limited, a joint venture between Adani Exports and Wilmar Limited, has purchased the Mantralayam oil seed processing factory of ITC Limited.

Acquired at a cost of Rs 26 crore, the Mantralayam facility is a fully integrated oil seed processing factory and will serve as the base for Adani Wilmar's foray into the south Indian market.

Taken over earlier this year, Adani Wilmar has already completed expansion of the facility to suit its needs. Processing and refining and packaging started from May 1. The new unit will make it easier for Adani Wilmar to supply over 40 per cent of all retail outlets in south India.

"Adani Wilmar has just begun packaging of refined edible oil at the Mantralayam factory", said Angshu Mallick, general manager, sales and marketing, of Adani Wilmar.

With this move, its presence will grow from just 15,000 outlets in south India to over 1.20 lakh outlets, he added. The factory was taken over at a price of Rs 26 crore, a sum of Rs 8-10 crore will be spent on capacity expansion, network stabilisation and other factors.

"The Mantralaya processing facility is one of the most integrated oil seed processing factories with two independent refineries and excellent processing facilities," Mallick stated. The facility has capacity of 9000 tonnes per month.

Adani Wilmar has lagged in the south India market so far. "According to a A C Nielson report, only one per cent of sales came from the south, while 33 per cent of sales came from the north. But with this facility in place, we will increase stock points from two at present to 11 within a short period," Mallick stated.

The Mantralayam facility and a newly acquired processing factory in Rajasthan will give Adani Wilmar additional processing capacity of 3000 tonnes per month. With price of a litre of edible oil estimated at Rs 50, monthly sales are is expected to increase by Rs 15-20 crore, fetching additional revenue of about Rs 200 crore through the two new factories.

Adani Wilmar reported sales of Rs 970 crore in the past fiscal. It expected sales to touch Rs 1600 crore by the end of the current fiscal, Mallick said.

Freight charge was about Rs 2,300 per tonne from Gujarat to south India. The freight charge will come down to Rs 500 per tonne from the Mantralayam factory.